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Gov. Whitmer asks MCCA to speed up auto insurance refund payments

Taxi car damaged in a crash
Michael Jin
The governor said the Michigan Catastrophic Claims Association fund has banked $5 billion.

Governor Gretchen Whitmer has called on the Michigan Catastrophic Claims Association to adopt an accelerated schedule for approving refund checks of up to $675 per vehicle to auto insurance customers.

“The surplus belongs to Michigan policyholders and should be promptly returned directly to them in full, in the form of refund checks,” Whitmer wrote Monday in a letter to MCCA Executive Director Kevin Clinton.

The governor said the MCCA fund has banked $5 billion—due largely to a benefits cap on payouts for catastrophic injury claims that she signed into law in 2019:

"The surplus reflects premium overcharges and is partly a reflection of the cost-saving measures implemented in the historic, bipartisan no-fault reform legislation I signed into law in 2019. Since then, many Michiganders have experienced financial hardships during the ongoing COVID-19 pandemic. Now is not the time for the MCCA to withhold money owed to Michiganders. I urge you to move swiftly to return the surplus funds to policyholders in the form of lump-sum checks. Billions in surplus funds should not be held by insurers to invest for their own profit or be conditioned on the renewal of a policy."

The 2019 law reduced a surcharge to fund the MCCA and cap benefits.

The measure has come under fire for its limits on payments to help care for people who are severely injured in car crashes.

Critics, including family members of auto accident survivors, say that the refund payments will drain the fund of reserves needed to fix problems with the law.

Jim Howell is a former Republican state representative. His son was catastrophically injured in a car accident.

He says it's not a coincidence that it's an election year.

"This is nothing more than a political move. It's using the MCCA money to buy votes," he said.

Howell says the state Legislature and the governor should fix the law instead of taking money away from a fund for injured people.

The measure has forced what some say is the collapse of the long-term care industry for survivors. Hundreds have lost care so far.

An insurance industry group released a statement saying, if the law is changed, it should guarantee limits on provider payments will remain.

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